The Trans-Pacific Partnership (TPP) is the biggest trade and investment deal in 20 years, covering countries that represent more than 40% of global gross domestic product (GDP).
Approximately one third of Australia’s total goods and services exports go to the other TPP countries (Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam).
A ‘new generation’ agreement
If the TPP succeeds in its goal to define the rules of the road for trade, as US lead negotiator Michael Froman puts it, it will be even more important than these figures suggest.
This new generation, 21st Century agreement differs from all existing agreements, because of its wide membership in terms of geography and levels of development, and also the broad and deep scope of its provisions, covering some areas not previously addressed such as “regulatory coherence”.
The TPP will reduce or eliminate tariffs on an enormous range of goods: 98% of tariffs on Australian exports to TPP countries.
These tariff reductions will make Australian goods cheaper in TPP countries, benefiting Australian producers and exporters.
However, the TPP is equally focused on non-tariff governance issues, making it even more important, intrusive and controversial. For example, the TPP contains obligations in relation to the liberalisation of trade in services, which account for a steadily increasing portion of global GDP, and with almost 35% of total Australian services exports going to TPP countries.
The TPP also sets minimum standards for intellectual property, labour and the environment, which are enforceable through the TPP dispute settlement system, potentially giving rise to trade sanctions for breach.
The secrecy FACTOR
Like most trade and investment agreements, the TPP was negotiated largely in secret.
Some claim that secrecy helps negotiators achieve a better deal, preventing powerful interest groups from mobilising against particular aspects of the agreement. Others claim that secrecy allows special interests to capture rents from the agreement against the public interest.
Whichever view is correct, the secrecy has fuelled the anxieties of civil society and industry alike in Australia and other TPP countries.
Not yet ratified
Although summaries of the concluded agreement are available, a detailed assessment of the TPP must await the translation and public release of the 30 chapters of the agreement, which will take several weeks.
Once the authentic texts have been released, countries will need to ratify the agreement according to their domestic processes.
The TPP has been a sensitive issue on the left and the right of politics. This is particularly true in countries with forthcoming elections.
In Australia, Opposition leader Bill Shorten has welcomed the finalisation of negotiations for the TPP, subject to the release of the full text.
In the US, Democratic presidential candidate Hillary Clinton has stated that she is not in favour of “what she has learned” about the TPP. Republican presidential candidate Donald Trump has described the TPP as “an attack on America’s business”.
In Canada, Tom Mulcair, the head of the New Democratic Party has said: “The NDP, when we form government on October 19, will not be bound by this secret agreement that [Prime Minister Stephen] Harper has been negotiating.”
Some of these statements may be merely political sound bites for domestic consumption. However, even if a country did not ratify the TPP, a critical mass is expected to ratify and bring the agreement into force in the relevant countries within two to three years.
This article was originally published by DemocracyRenewal.edu.au
Banner image: MSC Rochelle, by Andrew Priest, Flickr